Kik's cryptocurrency will be called Kin.

Kik, which was founded by a group of college students in 2009, is actively used by 15 million people per month and reaches 40% of American teenagers, according to the company.

ICOs, a red-hot way to raise money using the technology behind Bitcoin, have exploded this year with over $1.8 billion raised year-to-date, according to data from financial technology analytics provider Autonomous NEXT. They've allowed some companies to circumvent traditional fundraising methods, such as from venture capital and via the capital markets, to raise millions of dollars in a matter of seconds.

The massive growth of the ICO market is viewed by many people in financial services as a bubble, with some firms using the method as a way to raise vasts amount of money without offering an actual product. To raise money through an ICO, a company issues a new digital currency that can either be spent within its ecosystem, a bit like Disneyland dollars, or used to power part of the business.

Kik's ICO will create a new cryptocurrency called Kin, which will be used within the app for transactions. According to Tanner Philip, a product manager with the firm, the company hopes Kik's 300 million registered users will help drive the adoption of the new digital currency across digital platforms.

According to Kik CEO Ted Livingston, Kin has been in the works since 2014 and is the successor of an earlier prototype called Kik Points, a non-blockchain digital currency.

"We've been thinking about getting involved in cryptocurrencies since 2011," Livingston told Business Insider.

The $125 million "hard stop" for the capital raise is close to $5 million more than what the Ontario-based company has raised in venture capital. Already the firm has raised $50 million through the new cryptocurrency in a presale with investments from cryptocurrency hedge funds Pantera Capital and Polychain Capital as well as from venture capital firm Blockchain Capital. The public sale for the remaining $75 million will take place in two weeks on September 12.

Only 10% of the total supply of Kin will be sold during the ICO. 60% will be held by the so-called Kin Foundation and released based on a rewards system to folks who precipitate Kin transactions, according to Philip.

"If I am a game developer, for example, and I can create an environment in which users are transacting Kin between each other, then I would be rewarded," Philip said.

Kik's ICO will be one of the few open to US investors. In July, the Securities and Exchange Commission said that ICOs can sometimes be considered securities -- and as such are subject to strict laws and regulations. In order to avoid such regulatory requirements, many ICOs since then have been closed to US investors.